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Forbes: eBay and Republican lawmaker score clean energy win in Utah

When eBay, the world’s largest online marketplace, built its first-ever data center in South Jordan, Utah, it wanted to not only design and build the site to LEED Gold standards, it wanted to use clean energy to power much of the sprawling facility. This wasn’t simply part of eBay’s company-wide commitment to sustainable operations, it was a bottom-line business decision.

When eBay, the world’s largest online marketplace, built its first-ever data center in South Jordan, Utah, it wanted to not only design and build the site to LEED Gold standards, it wanted to use clean energy to power much of the sprawling facility. This wasn’t simply part of eBay’s company-wide commitment to sustainable operations, it was a bottom-line business decision: sourcing renewable energy would stabilize and reduce long-term energy costs and minimize environmental impacts in a state that gets 94 percent of its electricity from coal.

But there was a problem: Utah law didn’t allow non-utility energy consumers to buy and transmit power directly from renewable energy developers.

Together with Data Center Pulse, an association of data center professionals representing individuals from more than 1,000 companies in 66 countries including Google, Oracle, Twitter and Adobe, eBay began efforts to change the law. A working group that included representatives of eBay, Republican State Senator Mark Madsen, Rocky Mountain Power (the state’s largest electric utility), renewable energy producers, consumer groups and industrial stakeholders got together to craft legislation to make renewable energy available to Utah energy consumers – with the key provision of not raising electricity rates or taxes for local Utah residents.

That legislation, Senate Bill 12, was unanimously approved this month by the Utah Senate and House and was signed into law yesterday by Governor Gary Herbert. The law goes into effect this summer.

This success story occurs at the intersection of economic growth and clean energy and is a win-win for Utah’s economy and its environment. eBay, which employs more than 1,500 people in the state, says the green-power option is a key prerequisite for boosting its presence there. The company plans to build a second data center and add 2,200 jobs in Utah.

The buy-green option will also encourage other companies, which may have been reluctant to locate in Utah because of the lack of renewable energy options, to give the state a second look. Siting decisions for major facilities are among the most important a company makes and reliable, low-cost energy is a critical variable. With an ever-growing number of major corporations looking to reduce their environmental footprint, the legislation sponsored by Senator Madsen will increase Utah’s economic competitiveness.

“Companies have been unwilling to site in Utah due to the lack of renewable energy options. This legislation could be the tipping point for these companies, attracting jobs and revenue to the state,” Dean Nelson, eBay’s senior director of Global Foundation Services and founder of the Data Pulse Center, told Utah lawmakers at a hearing last fall.

The Utah legislation embraces a fundamental free-market solution, choice: it gives major energy users – especially energy-hungry data centers — choices when it comes to sourcing their energy. That, in turn, means more flexibility to control energy costs and reduced exposure to volatile fossil fuel prices.

The legislation also opens the Utah energy market to new players who are leading the transition to a clean energy economy. Utah has enormous renewable energy potential that includes geothermal, wind and solar power and the legislation aligns with the state’s goals of reducing greenhouse gas emissions to 2005 levels by 2015, and sourcing 20 percent of the state’s electricity from renewables by 2025. (See Utah Renewable Energy Industry by the Economic Development Corporation of Utah). It also advances Governor Gary Herbert’s Ten Year Strategic Energy Plan, which calls for expansion and development of the state’s renewable energy resources.

An important lesson to be drawn from the Utah experience is that significant progress in building a clean energy economy is possible even as the debate in Washington D.C. rages over energy policy and climate change and what, if anything, to do about. And it demonstrates – powerfully – that building a clean energy economy is a priority everyone can rally around.

The actions of eBay and other companies similarly committed to sustainability are important levers. They didn’t need to convince the Utah state legislature that a change in the law governing access to renewable energy would help protect the environment and reduce greenhouse gas emissions. They only needed to make the case that providing access to renewables would mean new economic growth and jobs for Utah. Those jobs won’t just come from companies such as eBay who can now expand their operations more cost-effectively, or other companies that will now find Utah a more attractive place to locate. The legislation will also mean more jobs at renewable energy producers in the state.

In short, it sends a powerful statement to both producers and consumers of renewable energy that Utah is open for business. That’s a message everyone wants to hear.

Mindy S. Lubber is the president of Ceres and a founding board member of the organization. She also directs Ceres’ Investor Network on Climate Risk (INCR), a group of 100 institutional investors managing nearly $10 trillion in assets focused on the business risks and opportunities of climate change.
Mindy regularly speaks about corporate and investor sustainability issues to high-level leaders at the New York Stock Exchange, United Nations, World Economic Forum, Clinton Global Initiative, American Accounting Association, American Bar Association and more than 100 Fortune 500 firms. She has led negotiating teams of investors, NGOs and Fortune 500 company CEOs who have taken far-reaching positions on corporate practices to minimize carbon emissions, water use and other environmental impacts. She has briefed powerful corporate boards, from Nike to American Electric Power, on how climate change affects shareholder value.